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Who gets the security deposit if you don’t manage the property anymore?

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04/29/2016 | Author: TAR Legal Staff

As a property manager, I maintain a trust account for tenants’ security deposits. The landlord terminated our management agreement effective today, and a tenant in the property notified me that he won’t be renewing his lease when it expires next month. What should I do with the tenant’s security deposit?

You should do two things in this situation:

  1. Forward the security deposit to the landlord and remind him that he has a duty to account for the deposit when the tenant vacates the property.  
  2. Send written notice to the tenant advising him that:
  • You are no longer the agent for the landlord.
  • You tendered the security deposit to the landlord.
  • The landlord is responsible to account to the tenant for the security deposit.

You can use TAR form 2210, Notice to Tenant of Change in Management and Accountability for Security Deposit, to notify the tenant of the situation.

If you and the landlord instead agree that you will continue to hold the money and account for the security deposit, such an arrangement should be stated in writing and specifically outline all parties’ responsibilities, such as who will inspect the property for damage upon the tenant’s departure and who will make determinations about any deductions.

Read more legal FAQs on texasrealestate.com

Categories: Property Management, Forms, Legal, Landlords, Renters
Tags: property management, leasing, forms, legal, legal faq, renter

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Legal disclaimer

The material provided here is for informational purposes only and is not intended and should not be considered as legal advice for your particular matter. You should contact your attorney to obtain advice with respect to any particular issue or problem. Applicability of the legal principles discussed in this material may differ substantially in individual situations.

While the Texas Association of REALTORS® has used reasonable efforts in collecting and preparing materials included here, due to the rapidly changing nature of the real estate marketplace and the law, and our reliance on information provided by outside sources, the Texas Association of REALTORS® makes no representation, warranty, or guarantee of the accuracy or reliability of any information provided here or elsewhere on texasrealestate.com. Any legal or other information found here, on texasrealestate.com, or at other sites to which we link, should be verified before it is relied upon.

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